I think western companies could learn something from this Asian business structure. Clearly they are doing something and the western world is going to have to adapt to the changing world market if they want to survive.

Expanding into unrelated (or just slightly derivative) fields would provide a cushion for their bottom lines and introduce more competition to existing markets.

It seems like Samsung is ahead of the game, in terms of the way they run their company. Being concerned more about market share, and less about profits, is beneficial for the company in the long run. They seems very stable and have a much different setup than is to be expected, having family play a part in their ownership. It will be interesting to see how Samsung progresses in the future.

Samsung's success is one that is dependent on the family owners to keep their minds where they have always been: forward. Samsung is extremely smart to be thinking about the future and long term growth. The new lines the are releasing hopefully by 2020 are going to be a huge step in technological advances, and the saving of the planet. It has been talked about for ages the need to improve to electric and solar based energy but Samsung has made a crucial step to putting plans in action. Hopefully they will succeed!

Samsung's success is one that is dependent on the family owners to keep their minds where they have always been: forward. Samsung is extremely smart to be thinking about the future and long term growth. The new lines the are releasing hopefully by 2020 are going to be a huge step in technological advances, and the saving of the planet. It has been talked about for ages the need to improve to electric and solar based energy but Samsung has made a crucial step to putting plans in action. Hopefully they will succeed!

And yet Samsung is making many of the exact same mistakes the Japanese companies made. Among the biggest is essentially trying to do everything, including becoming your own competitor by manufacturing components and designing and creating consumer products for the exact same industry. Obviously your customers/competitors aren't too keen on this new competition and start to cancel orders etc, creating a more toxic boardroom as managers are essentially competing amongst themselves instead of focusing on competing with the outside world. It happened at Sony, it's happening at Samsung.

Take for example Samsung's foray into tablets. At best, their tablets are pretty much middle of the line Android affairs, nothing too spectacular. But their entry into this market(which they were previously still making lots cash from sales of memory, SSDs and to a lesser extent CPUs), really rubs their custompetitors the wrong way and gets them to start canceling orders and looking for new suppliers. In the long run, Samsung is probably sacrificing more market share for the tablets than they are worth.

I think Samsung is definitely implementing successful business practices that other companies should be trying to copy. With the amount of investment money flowing into China, they're seeing an obscene amount of short-run expansions, but if they learn from companies like Samsung then they'll easily turn that short-run growth into long-term profits.

It is unusual to me - a South Korean and a former employee of Samsung Electronics - to find my ex-employer's story, especially in Leaders' section amongst the signs of global economic downturn. The term 'unusual' can be backed by readers' comments few in number compared with those to other stories. South Korea and its businesses have not been on the central stage as China, India and emerging markets have.

Global economy is looking for a way out and Goldman-Sachs has coined MIKT new markets. Whatever the secrets of Samsung's success, we can still be patient until its prosperity model can earn the vindication - globally.

"To some, Samsung is the harbinger of a new Asian model of capitalism. It ignores the Western conventional wisdom."

This story is a prime example of how everything in the world is interconnected. A company in Japan affects compainies all over the world. China clearly is looking up to Japan and for years companies all over te world have been looking up to Western contries...not much longer.

Asians in US, file the patents. So it may only be that the inventive ones tend to make their way here, or simply conditions in US let them file more often.

I have to wonder if the Asian model has less to do with any particular culture, and more to do with burning desire to succeed as a nation. On the other hand, Japan and Korea both have uniquely strong collectivist cultures which lend themselves to a nation wide element of burning desire.

I've heard also that the Korean gov picked or backed Samsung and Hyundai over other groups. Success is more likely when the village backs their best warriors or merchants to the hilt?

So there was the Asian crisis, and currently we have the financial crisis. One "caused" by indulgent government support, and the other by an unregulated "free market" system.... Fed also by government largess and indulgence to mega companies.

The success of Samsung is no doubt a great story and a big tribute to the company. But to imply big Chinese firms are hot to learn the rope from Samsung is superficial in assessment. They are inherently different in many ways despite similarities cited in the article.

For example and for one thing, unlike China but like Japan before them, Korean firms enjoyed almost unlimited access to American know how and technologies.

It takes nothing away from it but being testimonial to Samsung’s canny foresight and business acumen to be reminded that it was Samsung who spent a then unheard of sum of $800 m to buy some proprietary rights of mobile phone technology from an American firm Qualcomm some 2 decades ago when business model for cellular telecommunications was not at all well established. What a daring and smart bargain Samsung pulled in today’s hindsight.

Major Chinese firms, on the other hand were and still are under strictest sanction against gaining access to American or western know how. Even large tender won by Huawie to provision telecom gears to AT&T was overruled by US government for "security concerns".

Nobody is complaining as such, but it is perhaps fitting to note that China launched successfully yesterday its first space station of indigenous technology and design, after China was refused to join the US led multinational “International Space Station” project (of 15 nations) years ago.

Like many technologies, space technology is more and more a commodity these days and it’s such a terrible waste if you have to reinvent the wheel all over again.

After all, former USSR launched world’s first space station (“Salyut 1”) way back in 1971, to be followed by US’s first (“Skylab 1”) 2 years later in 1973, and now China becomes world's third nation to have launched a space station, some 40 years later.

Nonetheless, being the most successful according to the Economist, there is indeed a lot to be learnt from Samsung by ambitious firms around the world, particularly in Asia. Personally I have been using a model of Samsung cell phone (“Anycall”) since 2008.

Samsung's success is not due to its innovation prowess. It beats any other company in its command of production and distribution. The massive OEM legacy is hard to replicate.

As for Asians not being "true" innovators, this is an ill-educated remark out of context. Historically (and I mean more than a 100 years ago) Asia was the seat of science and growth before western empires plundered and looted. Today, Asia is back into gear and given the stage of its evolution, it's doing quite well thank you. In a couple of decades, the world order as we know will be different.

@guest-ienlows: IBM and Intel are large innovative companies, but one is more a B2B brand and the other an ingredient brand. So the consumer perception is not as top of mind. But I disagree with you that Apple is not an innovative company. Innovation is not merely an engineering dream to create a new smaller chip or a faster database. Combining components in ways that no one has done before and then making them usable with fantastic software is innovation too, and Apple's contributions have been nothing short of stellar in changing human behavior, worldwide.

China can never be innovative as long as the incentive mechanism of governors are short-term GDP oriented. Even though some state owned companies have fat subsidies from central government, as long as they are evaluated based on short-term performance, there's no incentive for R&D...

When will clueless columnists stop claiming that Asians are only good at incremental innovation, when U.S. foreign-born scientists, who are mostly Asians--which include Middle Easterners, make far better scientists and engineers (producing patents and research papers of higher quality) compared to local-born U.S. scientists who are mostly White? If Samsung is not truly innovative, then 99% of U.S. companies are less than innovative. By the way, Apple is not an innovative companies, Intel and IBM are far more innovative than Apple, yet they don't get the recognition they deserve.